We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR)  stands against the other high growth mega cap stocks.

Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.

What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.

These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.

To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.

A software engineer manipulating a vast network of code on virtual monitors.

Palantir Technologies Inc. (NASDAQ:PLTR) 

Palantir Technologies Inc. (NASDAQ:PLTR) is a developer and deployer of software platforms for big data analytics. It serves different industries including intelligence & defense, healthcare, and commercial. The company has grown its revenue by 31.48% over the last 5 years.

Panatir was the best performer in the S&P 500 last year and is on course to repeat the same this year but a sell-off in the last 3 days, where the stock has lost 23% of its value, has spooked investors. We believe this is a great opportunity to take a position in the stock which by all measures is overvalued, but for good reasons.

The stock’s market cap is currently $230 billion but it is already being touted as the next trillion-dollar company. Wedbush analyst Dan Ives, who believes the era of AI software has finally arrived and Palantir is set to be the beneficiary, is particularly bullish on the company’s long-term prospects:

The AI Software era is now here in our view. We believe the two best software plays on the AI Revolution for 2025 remain Palantir and Salesforce.

Ives believes people are underestimating the amount of capex that will go into building AI use cases. The hyperscalers take all the attention for now but once companies start working on building AI use cases together with the government, we could see a once-in-a-generation type of spending that could amount to $2 trillion in the next 3 years! The current dip provides the perfect opportunity to take a position in the stock.

Overall PLTR ranks 3rd on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

 

Disclosure: None. This article was originally published at Insider Monkey.